Tuesday, January 11, 2005

The Social Security Debacle

And quite a big one it will be. Recently, Random Roger argued that
I still think that private accounts will be a bad idea for most individuals. I am very surprised this doesn't get talked about more. The vast majority of people will mis-manage these account. There are a lot of brokers at big firms that mis-manage accounts the are entrusted to care for. I saw some statistic over the weekend that said 2/3 of social security recipients rely on their checks for most of their income. This is a disaster for society waiting to happen.
The government has good intentions, really. They want to help the people who always end with the short end of the stick. That sounds fair. What they don't realize is that too much choice can sometimes end up being really disastrous. Psychological studies are rife with numbers proving that when people are faced with too much, they won't act at all. It is partly the reason I stay away from mutual funds, or that could just be my own silly hangup. In short, there has to be a better way to save the dying anmial we call social secuirty if retirement is to mean anything of value by the time I cash in my chips. Anyways, Bush and company are advocating that that privatized source of funds be placed in equities, which I would think would do way with the security behind social.

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